Recently, Chicago Federal Reserve Bank President Austan Goolsbee stated that the economy is on the golden path, marked by a decrease in inflation and the avoidance of a recession. Fed policymakers are widely expected to leave its target policy rate in its current range of 5.25%-5.50% when they meet in about two weeks. This has led to the rise of the best tech stocks to buy.
When Federal Reserve policymakers assemble in approximately two weeks, it is widely anticipated that the target policy rate will be maintained within the 5.25% to 5.50% range. In July, the personal consumption expenditures price index, as measured by the Fed’s preferred indicator, increased by 3.3%.
This represents significant progress, as it is now more than halfway toward the Fed’s 2% target, compared to the 7% peak observed last summer. Moreover, technology stocks, given their historical resilience and innovation-driven potential, are likely to experience positive performance in the same period. These three stocks are especially prominent to have long-term growth catalysts all while maintaining strong and healthy financials.
Applied Materials Incorporated (AMAT)
Applied Materials Incorporated (NASDAQ:AMAT) is a corporation that supplies software and equipment for the manufacture of semiconductors and displays for consumer technology. The firm is in constant innovation in order to meet consumer demand.
AMAT stock is up 58.8% YTD. Most analysts rate the stock as a buy, with the forecasted 1-year price target averaging to $154.33.
Applied Materials competes in the semiconductor industry, which is currently valued at $573.44 billion and is projected to grow at a 12.2% CAGR to $1380.79 billion by 2029. The rising use of AI allows semiconductor manufacturers to reduce human error and optimize resource utilization without compromising design quality. An increase in demand for more advanced chips in order to keep up with cutting-edge technology is also a prominent driver of growth for the semiconductor sector. Along with supplying equipment used in the semiconductor industry, Applied Materials is also dominant in the flat panel display market which has a 6.11% CAGR to $160 billion by 2028. Rising demand for higher graphics quality and saturation from the automobile, computer, cell phone, and similar industries is mainly fueling this industry’s growth.
Company sales growth was negatively impacted because of the pandemic but has been on a steady recovery from 2020 with an 11.55% growth rate in 2022. Along with healthy amounts of spending in R&D, the company is on a path to even more profitability and growth. This make it one of those best tech stocks.
Applied Materials is innovating rapidly to meet industry demands, and this is a key catalyst for long-term growth. In July, Applied Materials launched Vistara, the company’s most powerful wafer manufacturing platform to date. The platform is flexible, allowing companies to use a wide array of chamber types and sizes. Vistara also uses its thousands of sensors to send Applied’s AI software real-time data to hasten recipes for chip performance and power. Finally, carbon-intensive construction materials and energy consumption are lowered in comparison to the company’s previous platforms in order to meet sustainability needs and allow chipmakers to generate more wafers in smaller facilities.
Overall, AMAT stock is a strong technology stock poised to grow in the long term from its innovative business strategy and recent product launch. It’s why it’s one of those best tech stocks.
Okta Incorporated (OKTA)
Okta Incorporated (NASDAQ:OKTA) is an American cloud services company that specializes in cybersecurity cloud services. Yahoo! Finance reports 36 analysts predicting a 1-year price range on OKTA to be between $64.00 and $125.00, with a mean of $94.00.
Okta shows healthy financials with revenue for Q2 2023 at $554 million growing at a 1-year 23% CAGR. Impressive signs of profitability are evident in the $121.1 million FCF growing 64.7% YoY, a $53.1 million in cash from operations growing 378.9% YoY, and $495 million in cash from investing increasing by 2,502.2% YoY. This helps make it one of those best tech stocks.
Okta’s has developed new SaaS offerings for future growth. The company is launching Okta Device Access in Q3 2023, which is a cybersecurity software service that protects access to corporate devices while also making the logging-in process on these devices easier for employees. Okta has also revamped a prior SaaS offering through the release of its Elevate Partner Program, which improves registration processes and adds a system that gives members access to an advisory council. Both of these new services meet growing customer needs in the cloud SaaS industry, driving up revenue for Q3 2023.
Okta and VMware have also renewed a partnership with Google to meet needs on security group projects. The company’s Workforce Identity Cloud will be used to provide security to users within the Google Cloud ecosystem, keeping projects safe while extending Okta’s contract. Okta has made a new partnership with startup Kandj Incorporated in a contract to improve Apple device security to corporate networks. With a rise in employees working remotely, the demand for corporate network security has increased which suits well for the partnership contract.
OKTA is a must-buy tech stock this September because of its healthy financials, new cybersecurity offerings, key partnerships, and more mentioned above. All in all, it’s one of those best tech stocks.
Nvidia Corporation (NVDA)
Nvidia Corporation (NASDAQ:NVDA) is a technology company that designs graphics processing units (GPUs), application programming interfaces (APIs), and system-on-a-chip units (SoCs). Yahoo! Finance reports 45 analysts predicting a 1-year price range on NVDA stock to be between $382.00 and $1,100.00, with a mean of $620.00.
Nvidia shows healthy financials as quarterly revenue of $6.05 billion grew at a 1-year 23% CAGR. Nvidia demonstrates impressive signs of profitability with GAAP earnings per diluted share for the quarter of $0.57 up 111% from the previous quarter. Management has been able to handle operations well while improving return on investments through a gross profit of $15.3 billion estimated to grow 102.5% in the coming year.
The market for GPUs was valued at $33.47 billion in 2021 and is forecasted to grow to $477.37 billion by 2030 at a 33.3% CAGR. The market for GPUs is expanding as a result of the rising popularity of virtual and augmented reality, as well as the high demand for high-performance GPUs.
Nvidia is perfectly situated to be a profitable investment in short and long-term investments. In particular, the company seeks to increase the manufacturing of its GPUs. Recent growth in demand for its GPUs and its use in creating massive AI models for programs such as ChatGPT demonstrate its significance as one of the main computational power suppliers. Jensen Huang, founder, and CEO of Nvidia, stated that the company was “significantly increasing their supply to meet surging demand for their products like the H100” in the first quarter when it reported a huge 19% increase in revenue to $7.2 billion from the prior quarter.
Being one of the main suppliers and having worked on matching rising demands for its GPUs, NVDA stock is well set to be a highly profitable stock in the coming years.
On the date of publication, Michael Que did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
The researchers contributing to this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.